Elon Musk offers to buy Twitter for $43B after turning down seat on board

Elon Musk has reportedly ordered broad layoffs at Twitter

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New owner Elon Musk is reported to have ordered broad layoffs at Twitter Inc., according to The Wall Street Journal.

Reports coming into Musk’s acquisition of the microblogging company suggested the job cuts could be as high as 75% of the company’s workforce. However, the Journal report notes that the full scale of cuts being discussed couldn’t be determined. Referencing people familiar with the matter, the report claims that the layoffs are expected to reduce engineering positions and other positions in the company.

Musk’s reorganization of Twitter started on Thursday, Oct. 27, the day he took control of the company and began with the purge of prominent executives. According to reports, those “escorted out” of Twitter HQ were Chief Executive Officer Parag Agrawal, Chief Financial Officer Ned Segal, Vijaya Gadde, the head of legal policy, trust and safety, and Sean Edgett, the company’s general counsel.

Subsequent reports suggest that the four senior employees were allegedly fired “for cause,” with Musk being claimed to have done so as a way to not pay the now unemployed senior executives multimillion-dollar severance packages. The Journal claims that the former executives are now weighing their options, with two executives having been set to collect more than $100 million in their severance packages.

The alleged attempt to avoid paying out benefits – alleged as all the details are pure speculation and/or anonymous sources versus Twitter, Musk and those affected discussing details, could also see further staff fired on Monday before Nov. 1. The date is significant as it’s a vesting date for Twitter’s compensation program.

While the swiftness of Musk’s purge of senior executives on his first day on the job was surprising to some – Gadde is reported to have cried upon hearing the news, a push by Twitter to reign in employee costs is not new. Twitter fired several top executives and announced a hiring freeze in May, with Agrawal saying at the time that he was “proud that we shifted the culture internally to make bigger bets, move faster and eliminate sacred cows.” Little did he know that he would be the head “sacred cow” eliminated in October.

The job cuts at Twitter come amid a worsening macroeconomic outlook as experts predict that the world is heading towards a global recession amid 40-year-high inflation and the ongoing Russian invasion of Ukraine.

Given the current outlook, tech firms large and small have announced layoffs or have frozen hiring. Companies that have cut staff include Microsoft Corp., DocuSign Inc., Twilio Inc., Robinhood Markets Inc. and Oracle Corp. Companies that have frozen hiring include Google LLC, Apple Inc. and Meta Platforms Inc.

Photo: Wikimedia Commons

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